Trading the News Works

Stocks around the world fell on Friday before the opening of the U.S. markets because of a number of fears that have been growing. For starters, China is releasing their economic data over the weekend, and this will be likely to show investors exactly what’s going on with the shrinking of the world’s second largest economy. There have already been a number of concerns coming out of China after a prolonged and severe drop in their stock market, and this data will give a more precise look at where the country is economically. The numbers should show retail sales, fixed asset investments, and industrial production.

Thanks to the fact that the Chinese economy is so large, and there have been so many problems with the economy over the last year, it is only natural that traders remain cautious and pull their money out of the marketplaces. Many of them are even establishing short positions. However, as a binary options traders, you need to know that pulling your money out of the market isn’t quite the right move yet. Yes, it is smart to remain cautious here, and if you are uncertain about which direction to take, keeping your money out is correct. But you should be getting ready, rather than staying in hiding. As soon as the Chinese data is released, markets will start moving, and the beauty of being a binary trader is that you can trade either way and profit whether the market goes up or down.

It doesn’t have to be the Chinese stock market or the indices that represent it, either. This strategy is a valid one for any major news event. For example, the U.S. Federal Reserve will be meeting soon as they reveal their policy action. Thanks to the severe drop in new jobs recently, Fed Chair Janet Yellen has announced that there are lingering uncertainties about what the policy should be as far as interest rates go, so there’s a decent chance that they will remain the same for a while. If this is the case, then there will likely not be much change in the volatility of the U.S. markets, but this isn’t going to last for long. Eventually, the Fed will raise rates again, probably sometime in 2016. When they do, this will set off a number of large drops in the stock market, and being poised to make the trades that will earn you money off of those drops is the smart thing to do. You don’t want to pull the trigger on this too early, but you do want to keep yourself informed and know precisely when you should act. Just like with the Chinese data that is about to be released, this kind of trading the news strategy can have a huge impact on your bottom line, as long as you are aware and have a strategy in place and ready to go as soon as you need it.

The same goes with the “Brexit” vote, coming up on June 23rd. If England does vote to leave the European Union, then it’s likely to send ripples all throughout the European and world economy. As a binary trader, you will most likely want to focus on Forex currency pairs for this particular bit of news, but there will likely be opportunities in the British and other stock markets, too. Again, keep your eyes open for the big news items. Get a feel for what the impact will be and where with a number of different outcomes. Finally, get prepared to make the short term trades that will generate profit for you. As a binary trader, there are so many opportunities like these, you just need to find them.